Retailers struggle to make meaningful sales gains

When the Six 2 Six clothing and accessories store moved to a bigger location on south Myrtle Avenue in Monrovia, the shop was hoping for a boost in holiday sales.

But in the months leading up to Christmas that hope seemed to dim, according to owner Luis Lemus.

"I felt like it was not how I expected it to be," Lemus said. "It picked up in the three days before Christmas, but before that it was slow ... I was getting kind of worried."

If national figures released Wednesday are any indication, Lemus had a right to be worried.

A MasterCard Advisors SpendingPulse report reveals that sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased just 0.7 percent compared with last year.

That was well below the healthy 3 to 4 percent growth analysts had expected - and it was the worst year-over-year performance since 2008, when spending shrank sharply during the Great Recession.

Stores will have to scramble to salvage this year's holiday season, which can account for up to 40 percent of annual sales for many retailers.

If those sales don't materialize, stores are forced to offer steeper discounts. That's a boon for shoppers, but it cuts into stores' profits.

An employee from Ben Bridge Jewelers in Santa Clarita offered more evidence that consumers were pulling back in the weeks leading up to Christmas.

"It wasn't good ... I don't know what else to tell you," said the employee, who declined to give her name. "People just aren't spending as much as they would have in the past."

Retailers still have time to make up lost ground. The final week of December accounts for about 15 percent of the month's sales, according to Michael McNamara, vice president for research and analysis at MasterCard Advisors SpendingPulse.

But will they regain ground?

"Retail can change quite a bit, but my view is that they won't," said Michael Carney, an economist at Cal Poly Pomona. "I think things haven't changed that much since last year and the numbers seem to reflect that."

Carney noted that stores continue to offer deep discounts and are launching Black Friday sales earlier and earlier each year.

The Black Friday "creep" of launching sales earlier began in earnest a few years ago when stores realized that sales alone weren't enough to lure shoppers anymore, especially with Americans becoming more comfortable buying things online.

Kimberly Ritter-Martinez, an economist with the Los Angeles County Economic Development Corp., doesn't expect a big jump in retail sales anytime soon.

"I don't think we are going to see a last minute surge in spending between now and the end of the year, even with steep after-Christmas discounts," Ritter-Martinez said in an email. "The story of retail sales since the end of the recession mirrors that of so many other sectors in the economy - we are seeing improvement, but progress has been slow and hard won."

Consumers seemed to be more optimistic about the future going into the holidays, she said, although they were still cautious.

"I think a lot of people went into the holiday season with a budget in mind and kept to it," she said.

Justin Paraiso, a sales associate at the Radio Shack store on 4th Street in Ontario, said business was slow there until last week.

"It was mostly people just calling around to see if we had certain products in stock," he said. "Our tablets were the first thing to go. We were pretty much out of stock on those at all the Radio Shack stores."

Some retail executives don't yet have a handle on how sales turned out but did see some hopeful signs.

"We can't provide any specific numbers," said Shoshana Puccia, director of marketing at the Glendale Galleria.

But she said merchants there did notice more "wish list" buying this season than a year ago.

"We saw a lot of designer brand bags with higher priced items being carried about the mall and those are wish list items," Pucci said.